Research, credit, and energy: the moves to attract foreign investments

Taxes, research, energy and credit. These are the keywords of “Destinazione Italia” (Destination Italy), a wide project designed to attract foreign investments announced by the Italian government after the summer, which has now has partly been concretized through a law decree introduced in recent days and with a law design: the declared goal is to give confidence to Italian small and medium enterprises and to improve the Italian business climate to make it more competitive and attractive to foreign capital.

First point: taxes and bureaucracy. The so-called regime of “international ruling” increased from 3 to 5 years, which allows large foreign companies to negotiate rules and mechanisms for tax withholdings with the Revenue Agency, which will constitute a dedicated desk for foreign subjects. Additionally, there are facilitations for the concession of visas for researchers and startuppers, as well as investors and currently qualified workers. A bonus was introduced for the 2014-16 period for the research sector: the government has provided a 50% tax credit for additional expenses by companies in the research and development sectors, with a maximum breaks of 2.5 million Euros per company. In this manner, the government estimates to activate new investments in R&D for over than 600 million per year, using the 2014-2020 European funds.

Another branch of the “Destinazione Italia” interventions pertains to credit to businesses, one of the extremely weak factors in the Italian entrepreneurial tapestry in recent years. On one hand, the provision detracts from the ordinary tax treatment the medium and long terms loans granted to companies, applying a substitutive, lower tax; on the other, investments in company stocks will be fiscally favored. Additionally, the plan insists on preferential loans at zero interest rates to tackle industrial crisis situations, and more importantly, to favor the creation of new businesses by women and young adults. On the latter point, the government estimate is the activation of 300 million in new resources, with an employment impact of nearly 3,000 jobs.

Three measures were also launched to allow businesses and families to reduce their energy expenses. Firstly, new alternative incentives will be introduced for producers of renewable energy, from wind and solar power, so as to dilute the so-called A3 portion (the portion paid by all users to increase the funds destined to incentives for renewable energy) component of the bill. Secondly, there will be a revision of the feed-in tariff system, that is the possibility to cede energy inputted into the system directly to the Gestore dei Servizi Energetici (Electric Service Management) in exchange for a fixed remuneration for each kWh provided. Thirdly, the hourly tariff – the variation of the price of electricity based on the time of day, and the day of the week – will also be revised.

In the fundamental field of law, in order to guarantee an easier management of disputes for foreign companies, “Destinazione Italia” has reduced the number of Tribunale delle imprese (Business Court) branches: there are now nine (Bari, Cagliari, Catania, Genoa, Milan, Naples, Rome, Turin, and Venice).